Medicare Fraud – Why Kickbacks Hurt Patients

Medicare fraud is a huge problem in the United States. The FBI calls it an epidemic. The cost of Medicare fraud has been estimated by some to be $80 billion per year. Because Medicare is funded by tax dollars, all of us become victims when physicians get greedy.

Often there is also a personal side of Medicare fraud. A good example is a physician who provides unnecessary medical treatments simply to make money. The patient suffers, taxpayers suffer and the only one who wins is the corrupt and greedy healthcare provider.

Illegal kickback schemes, a form of Medicare fraud, also have a cost. Often these arrangements lead directly to unneeded treatment and services.

Earlier this year, the Justice Department announced a modest settlement with Sean Orr, MD, a neurologist from Jacksonville. Orr agreed to pay $150,000 to settle Medicare fraud charges brought by a whistleblower under the federal False Claims Act.

A nurse who once worked with Orr, Verchetta Wells, filed the case after telling the government that Orr “intentionally misdiagnose[d] several healthy patients as having serious neurological diseases and conditions – including multiple sclerosis and brain lesions – so he could bill for their treatment and prescribe expensive medications.”

Wells also named Southern Baptist Hospital of Florida in her complaint and accused it of actively concealing Dr. Orr’s Medicaid and Medicare fraud.

Wells claimed Orr routinely “over-tested” patients. He ordered more MRIs, CT scans and lumbar punctures (spinal taps) than other physicians affiliated with the hospital. Despite the over-testing, however, she claims that Orr was less interested in the results than other doctors. In her words, “he was quick to diagnose patients with severe diseases and conditions on scant evidence and begin treatment immediately.”

The hospital system appeared to know of the problem yet never fully advised his former patients.

Wells also claims that other physicians sometimes complained about Orr’s “aggressive” practices but none of them stepped up and reported him. That doesn’t surprise us. We have seen otherwise good doctors denied hospital credentials simply because they are viewed as whistleblowers.

Ultimately the hospital did take action and one day abruptly sent staff at the neurology practice home early. The next day employees were told that Dr. Orr was on leave and that anyone discussing the matter would be fired.

Over the following weeks, hospital system management reviewed hundreds of Dr. Orr’s patient files. Ultimately, Wells says that several otherwise healthy patients were found to have been misdiagnosed with multiple sclerosis and given expensive medications, medications with a high risk of side effects.

Wells said that Orr’s patients were never properly advised why Orr was gone and why they were being re-evaluated.

Wells concluded that Orr was guilty of hundreds, if not thousands, instances of Medicare fraud – patients given treatments they did not need. To compound the problem, these same patients were never fully informed that they had been misdiagnosed.

In 2014, the Justice Department resolved the Medicare fraud charges involving Baptist Medical Center – Jacksonville and the Baptist Health System. The hospital defendants agreed to pay $2.5 million. (Wells received a whistleblower award – based on the portion of the award paid in settlement of Sean Orr’s portion of the case. We believe her total award was $463,750.)

In May, the Justice Department settled with Orr who agreed to pay just $150,000. Prosecutors say the settlement was based on Orr’s ability to pay and not on the seriousness of the charges.

In announcing the settlement, Jacksonville’s United States Attorney, Lee Bentley, said, “Our office will relentlessly pursue physicians who misdiagnose and harm patients to satisfy their financial greed. We expect physicians to act honestly, with integrity, and in accordance with the approved standards of medical care. When they do not, we all suffer.

For his part, Orr reportedly told NBC News, “Recent further peer reviews of my work… [has] concluded that I operated within the standard of care. After all that has happened, my constant concern is to provide highly precise and personalized care for patients who are suffering from the effects of Multiple Sclerosis and other chronic neurological disorders. I believe that with time, the truth will prevail as evidenced by the patients who I continue to help.”

Orr’s non-apology seems to have fallen flat. New reports this month say the once prominent neurologist has a checkered past and a bleak future. Documents from the Florida Board of Medicine indicates that Orr’s license to practice medicine was suspended for 1 year as a result of having sex with a patient.

The state’s complaint against Orr says that a Orr told a female patient on her last day of treatment for multiple sclerosis to come back for a follow up visit on a Saturday while the office was closed. When she met him, he claimed to have feelings for her. The report says she “became fearful that [Orr] would abandon her as a patient if she rejected his advances.” Shortly thereafter, he had sex with her.

According to an investigative report from NBC News, Orr has his license back and is again practicing medicine. There are rumors, however, of a criminal investigation. For his former patients, that is probably welcome news.

Like the recent case in Detroit involving the so-called “Dr. Death,” Farid Fata MD, every one of Orr’s former patients have been affected. But for NBC, some of those stories would never have been told. [Use the search feature on this blog for extensive coverage of Dr. Fata’s case.]

NBC tells the story of Amber Taylor, a young mother who was referred to Orr because of constant headaches. He diagnosed her with multiple sclerosis, a diagnosis that she now believes was incorrect.

According to Taylor, the diagnosis was devastating. Not only did she quit her job, she borrowed $50,000 to retrofit her home to accommodate what she thought would be a permanent (and fatal) disability. She also suffered severely from powerful medications Orr prescribed for her alleged multiple sclerosis, medications that caused constant pain and suffering.

Allegations involving the dispensing of expensive medications intrigued us, but in reading the court records and media reports, it appears Dr. Orr was compensated by Baptist Health in part by the number of patients he treated. He also received consulting fees from pharmaceutical companies that made some of the expensive drugs he prescribed.

Congress long ago made medical kickback schemes illegal. As this story reveals, there is always a danger that kickback schemes lead to unnecessary treatment. When it comes to cancer drugs (Dr. Fata) or powerful neurological medications (Sean Orr), the side effects of these drugs can prove fatal or last a lifetime.

As this story confirms, Medicare fraud occurs in many forms. All involves the loss of taxpayer funds. Often, however, the effects are far more sinister.

Luckily in this case, a brave nurse stepped forward and filed a complaint. Although by the time of Wells’ complaint Baptist Health apparently knew of the problems, she claims the hospital system was actively trying to cover up the problems.

Need more reasons to report healthcare fraud? The federal False Claims Act, a Civil War era law, pays whistleblowers in Medicare fraud cases a percentage of whatever the government receives. As noted above, we believe that Ms. Wells received just shy of $500,000.

Most whistleblowers we represent aren’t in the case for money, however. They simply want to protect patients and stop fraud. In this case, it certainly appears that Orr needed to be stopped.

If you have inside, original source information of Medicare fraud, give us a call. We have helped our whistleblower clients collect over $100,000,000.00 in awards.

Across the nation, thousands of healthcare professionals have knowledge of Medicare fraud. Many are afraid to step forward. (Congress and most states have enacted powerful anti-retaliation laws. We can help protect you.) Others will ultimately pick up the phone and call a Medicare fraud hotline only to later learn that using the hotline won’t get them a large case award.

If you have information, please don’t delay. Bad doctors, hospitals that pay kickbacks and clinics that steal from taxpayers need to be stopped. Even if you never file, we can help you make an informed decision about the risks and rewards of being a whistleblower.

Have information about Medicare fraud? Call us. For more information contact attorney Brian Mahany at *protected email* or by telephone at (414) 704-6731 (direct). All inquiries are protected by the attorney – client privilege and kept strictly confidential.